Meet The Man Who Just Made A Half Million From The Sale Of Virtual Property

Many people might balk at the idea of paying even a dollar for virtual cow in a game like Farmville. But Jon Jacobs has just sold a virtual space station he's spent the past five years managing for a whopping $635,000 in total, making over half a million dollars. Who would devote so much time and investment into something that doesn't exist in the real world?

Make no mistake, Jacobs isn't your stereotypical gamer geek. An actor, filmmaker, cyber-celebrity and entrepreneur, Jacobs deals with movie and music moguls, running a business out of a 6,900 square-foot office in the heart of Hollywood, in the historic El Capitan Theatre building on Hollywood Boulevard, with windows overlooking the Kodak Theatre. Jacobs has a penchant for flamboyant dress. He has his own theme song. Jacobs' story is a larger-than-life tale that blurs the line between real-life and virtual-life fame and fortune.

In virtual life, Jacobs is the avatar "Neverdie," perhaps the most famous person in the whole of the Entropia Universe, a massively multiplayer online gaming platform designed by Swedish developer MindArk with a real cash economy. Until recently, Neverdie was the owner of one of the hottest virtual properties in Entropia, Club Neverdie, situated on a virtual asteroid around Entropia's first planet, Planet Calypso. Jacobs bought the virtual asteroid back in 2005 for $100,000, after taking out a mortgage on his real-life house.

Jacobs' avatar "Neverdie"

Taking out a hundred grand to buy virtual property may have seemed like poor business sense, but Jacobs had a plan. He turned Club Neverdie into a must-visit destination, one that includes more than a dozen bio-domes, a night club, stadium and a mall, where other players flocked to spend real cash on virtual goods and services. Jacobs was making around $200,000 in annual revenue, enough to comfortably support him and his family. Some might wonder why Jacobs didn't instead start a real-life business like most others. Jacobs' answer, "games made sense." Club Neverdie was a "turnkey business" for him -- besides dropping in from time to time to check on the property, the business largely ran itself and had no other employees besides himself.

Club Neverdie

In the recent $635,000 sale, Jacobs sold off his virtual property in chunks. The largest portion went to another avatar by the name of John Foma Kalun, who paid $335,000. This single transaction may be the largest virtual transaction ever, supplanting the previous record set by Erik "Buzz" Lightyear, another Entropia resident who bought The Crystal Palace Space Station for $330,000 in 2009.

Jacobs wasn't always a virtual celebrity, but even his past plays out like something out of a movie. His was born to a Miss United Kingdom and Adrian Jacobs, a prototypical Bond villain of sorts. An infamous '60s British financier nicknamed "Mr. X," the senior Jacobs was banned from the London Stock Market in the '80s after a string of shady deals, and has been reportedly quoted as saying, "I'll be back again, richer than ever!" You can almost hear the super-villain laughter. Adrian Jacobs died in 1997, but in 2009, his estate filed a lawsuit against J.K. Rowling, claiming the author of the Harry Potter series had copied substantial parts of Jacobs' 1987 children's book, Willy the Wizard.

Jacobs himself wanted to be an actor from an early age, dropping out of school in London to study acting at the renowned Sylvia Young Theatre School. In 1991, he moved to L.A. and started landing his first film roles. He had acted in and directed a number of mostly independent films, including a short film that screened at the Cannes Film Festival in 1998, but never quite made it big. After finishing up a movie in 2005, Jacobs was at a crossroads. He wasn't making enough money or even a steady income, and more than a decade in Hollywood hadn't panned out quite as he had hoped. Ironically, his game-playing habit, which he considered a vice, helped him launch a new successful career.

"I always used to feel guilty because when I was writing my screenplays, I found I could play games until 4 or 5 in the morning, whereas I would take all day procrastinating just to spend an hour writing something," Jacobs says. "I remember thinking, 'how am I going to justify this?'"

At first, Jacobs thought he would make a screenplay out of his game experiences. He even pitched Jean Claude Van Damme, who he knew from his time in Hollywood, on a film based on the character who lived in a virtual reality world and who 'never died.' The film was never made, but Jacobs' life imitated his art. He would later become involved in Entropia, creating the avatar "Neverdie." It was this involvement that led him to develop one of the most successful virtual businesses.

Now he is using sales of Club Neverdie to fuel another business he hopes to turn into a success, one that appropriately mixes the real with the virtual. Jacobs' Neverdie Studios employees about 13 people who create and design highly-realistic new planets in the Entropia Universe, each a virtual game or world experience of its own. He has been working with major music labels to create one of his first planets called "Rocktropia," an MTV-meets-virtual-world that launched in May. Players in Rocktropia can go on music-related quests or listen to live virtual concerts. Rocktropia has already signed up a few notable names, including the lead singer of Motorhead, Lemmy, and singer-songwriter Kevin Rudolph.

Jacobs raised $6 million in funding for Rocktropia and is looking to raise a second round soon. While he hasn't disclosed the number of players in Rocktropia, he says the planet is making around $10 per active user per month. A cut of that goes to the labels or artists in the game, based on the amount of traffic they drive.

(UPDATE: SEE sent me a clarification. The company says it had contracted Neverdie to work on Planet Michael but the two had "jointly decided to part ways," and are no longer working together.) This planet-building is part of a larger effort by some traditional media companies to try to create new streams of revenue from new media. Another studio Neverdie was once partnered with, SEE Virtual Worlds, takes Hollywood properties and develops them into massively multiplayer online games. SEE Virtual is behind virtual worlds like Planet Michael, an online world inspired by Michael Jackson, and the upcoming Van Helsing-themed virtual world Universal Monsters.

Neverdie hopes to popularize virtual worlds with the mainstream through Rocktropia and other projects. With large virtual networks, there's either Facebook or there's World of Warcraft. What's in between, like one-time media darling Second Life, has lost its luster. Jacobs acknowledges that virtual worlds are niche, but thinks they are one hit away from becoming mainstream. "What typically happens with a new medium is that pop culture has to embrace it before it loses its real stigma of being narrow," Jacobs says. "For example, with MTV in the early days, it wasn't until Thriller came along that everyone was watching MTV."

Though Jacobs wasn't able to crack Hollywood in the past, he says he is mingling with the Hollywood elite now. "I've met with every major studio in Hollywood now and had the red carpet treatment," Jacob says. "Funny enough, my avatar opened all the doors for me in Hollywood that I couldn't knock down as an independent filmmaker."

The once struggling actor used his house to fund a virtual asteroid. Now he's using his virtual asteroid to fund virtual planets. This has got to be the one of the most improbable, half-cocked business schemes out there, but it's one of those kinds that's so crazy that, hey, it just might work.